Lenovo computers
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Page 320
CASE EXAMPLE
Lenovo computers: East meets West
In May 2005, the world’s thirteenth largest personal computer company, Lenovo, took over the world’s third largest personal computer business, IBM’s PC division.
Lenovo, at that time based wholly in China, was paying
$1.75bn (A1.4bn, £1bn) to control a business that operated all over the world and had effectively invented the personal computer industry back in 1981.
Michael Dell, the creator of the world’s largest PC company, commented simply: ‘it won’t work’.
Lenovo had been founded back in 1984 by
Liu Chuanzhi, a 40-year-old researcher working for the Computer Institute of the Chinese Academy of
Sciences. His early career had included disassembling captured American radar systems during the Vietnam
War and planting rice during the Chinese Cultural
Revolution. Liu Chuanzhi had started with $25,000 capital from the Computer Institute and promised his boss that he would build a business with revenues of
$250,000. Working in the Computer Institute’s old guardhouse, and borrowing its office facilities, one of
Liu’s first initiatives was reselling colour televisions.
But real success started to come in 1987, when
Lenovo was one of the first to package Chinesecharacter software with imported PCs.
Lenovo began to take off, with Liu using the support of his father, well placed in the Chinese government, to help import PCs cheaply through
Hong Kong. During 1988, Lenovo placed its first job advertisement, and recruited 58 young people to join the company. Whilst the founding generation of Lenovo staff were in their forties, the new recruits were all in their twenties, as the Cultural Revolution had prevented any university graduates for a period of 10 years in China. Amongst the new recruits was
Yang Yuanqing, who would be running Lenovo’s
PC business before he was 30, and later become
Chairman of the new Lenovo–IBM venture at the age
22/10/2007
11:28
Page 320
CASE EXAMPLE
Lenovo computers: East meets West
In May 2005, the world’s thirteenth largest personal computer company, Lenovo, took over the world’s third largest personal computer business, IBM’s PC division.
Lenovo, at that time based wholly in China, was paying
$1.75bn (A1.4bn, £1bn) to control a business that operated all over the world and had effectively invented the personal computer industry back in 1981.
Michael Dell, the creator of the world’s largest PC company, commented simply: ‘it won’t work’.
Lenovo had been founded back in 1984 by
Liu Chuanzhi, a 40-year-old researcher working for the Computer Institute of the Chinese Academy of
Sciences. His early career had included disassembling captured American radar systems during the Vietnam
War and planting rice during the Chinese Cultural
Revolution. Liu Chuanzhi had started with $25,000 capital from the Computer Institute and promised his boss that he would build a business with revenues of
$250,000. Working in the Computer Institute’s old guardhouse, and borrowing its office facilities, one of
Liu’s first initiatives was reselling colour televisions.
But real success started to come in 1987, when
Lenovo was one of the first to package Chinesecharacter software with imported PCs.
Lenovo began to take off, with Liu using the support of his father, well placed in the Chinese government, to help import PCs cheaply through
Hong Kong. During 1988, Lenovo placed its first job advertisement, and recruited 58 young people to join the company. Whilst the founding generation of Lenovo staff were in their forties, the new recruits were all in their twenties, as the Cultural Revolution had prevented any university graduates for a period of 10 years in China. Amongst the new recruits was
Yang Yuanqing, who would be running Lenovo’s
PC business before he was 30, and later become
Chairman of the new Lenovo–IBM venture at the age